Fannie Mae-No Politics (FNMA)

[Usmcvet]

Obama FHFA Pick Mel Watt's Radical Vision For Fannie

A pre-crisis bill written by Democratic Rep. Mel Watt — President Obama's nod to run the Federal Housing Finance Agency — reveals that his ideas for regulating Fannie Mae and Freddie Mac are more radical than he lets on.
On the eve of the financial crisis, Watt actually proposed the creation of the regulatory agency he now seeks to run — only, he designed it not to reform Fannie and Freddie but to pressure them to underwrite even more affordable housing, exposing them to even more risk.
The bill he co-sponsored with then-banking panel Chairman Barney Frank — the Federal Housing Finance Reform Act of 2007 — would have forced the federally backed mortgage giants to meet even tougher quotas for affordable lending, while contributing to an "Affordable Housing Fund" to rebuild blighted urban areas.
"The real benefit of this bill is that it will provide a big stimulus for more affordable housing," Watt said at the time, ignoring concerns the agencies already were overexposed to low-income loans.
Such affordable housing quotas, set by the Department of Housing and Urban Development, led to the insolvency and $188 billion taxpayer bailout of Fannie and Freddie, now nationalized and under the control of the Federal Housing Finance Agency.
As President Obama's nominee to head FHFA, Watt has dodged questions about what he would do at the helm of the powerful agency. A career politician once voted the most liberal member of Congress, Watt has gone on a charm offensive to win over Senate Republicans, who have expressed strong reservations about his pick and plan to block a floor vote on his nomination.
During a recent Senate confirmation hearing, Republicans complained Watt offered few specifics in response to questions about his plans for Fannie and Freddie.
At one point, while probing his position on mortgage principal forgiveness, they questioned his sincerity. Watt implied he would follow FHFA's current stance against loan write-downs, even though he's publicly argued in favor of them.
If Senate Republicans want to know what he might actually do, they only need to read his proposed legislation, H.R. 1427. It's at least a partial blueprint of his agenda.
In March 2007, Watt said he co-authored the bill to create a new regulatory apparatus that "will provide a means to achieve our ultimate goal of expanding the supply of affordable mortgage credit across the country."
At the time, Watt was a senior member of the House Financial Services Committee and had just stepped down as chairman of the Congressional Black Caucus, where he'd pushed the government to boost minority homeownership. And Along4Zride is a very ugly man who has too much time on his hands.

http://news.investors.com/ibd-editorials-viewpoint/072613-665261-mel-watt-blueprint-for-socializing-fannie-freddie-mac.htm